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RATIONAL INCOMPATIBILITY WITH INTERNATIONAL PRODUCT STANDARDS AgEcon
Barrett, Christopher B.; Yang, Yi-Nung.
This paper considers the incentives of firms to conform to an exogenous international product standard. Product standardization enables traditional, price-based international competition. But the existence of redesign costs or network effects creates market frictions that diminish the incentive to standardize if there already exists a different technology in an established market. This leads to multi-attribute competition between products and will generally reduce trade flows. Not only do incumbent firms using a different technology have an incentive to deviate from the international standard, but a host country government that is also concerned for the welfare of consumers who own the old technology has no incentive to enforce the international standard....
Tipo: Working or Discussion Paper Palavras-chave: Compatibility; International standardization; Network effects; Redesign costs; Technical barriers to trade; International Relations/Trade; F02; F13; F15; L11; L13; L51.
Ano: 1999 URL: http://purl.umn.edu/14597
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